First published Sat Aug 6 for members of ElliottWaveTrader.net:  Last weekend, I prepared you for the potential set up for the 3^rd wave to much higher levels in the metals complex.  More specifically, I provided you with a map as to how the 3^rd wave set up would look on the GDX, should the market comply by filling in our 8 minute chart as outlined:

As long as we do not break below that support, and ideally remain over the 1.00 extension at 29.87, then I will be looking to complete 5 waves up off the recent low, which I would classify as wave (i) of wave 3 of iii.  That suggests that after a corrective wave (ii) pullback is seen, and we then break out over the top of wave (i), the market is well on its way into the heart of its 3rd wave, and targeting the 39-41 region next.

And, over the last week, the market has complied in almost textbook fashion.  In fact, once we completed 5 waves up into the top of our wave (i) target region, I sent out an Alert with a target box for a wave (ii).  On Friday, the market dropped right to the top of our target box.

While the micro count in the c-wave does not look quite complete, it would seem that the market could still see lower before this c-wave bottoms. But, as long as the GDX remains over 29, I am viewing this chart as being on the cusp of the heart of a 3^rd wave break out, which is pointing to 39-41, and quite quickly.

Now, for those who will read my words and consider leveraging up to the hilt in an irresponsible manner, I want to interject reasons one should still maintain your standard risk management practices.  Set ups such as these are estimated to be about 70% probability.  That still means there is a 30% probability that it could fail.  One of the reasons this set up could fail is because all retracements in the GDX chart have been VERY shallow.  This forces an analyst such as myself to make certain educated assumptions about where 2^nd waves in the structure are located (since they are otherwise deeper retracements), which can have an effect upon the overall wave count if even one of those assumptions is wrong.

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